Moderate Democrats flexing muscles on fiscal matters

With Congress gearing up to consider President Obama's budget, moderate Senate Democrats are stepping up their efforts on the budget and other Democratic priorities in a push to form a unified block urging fiscal restraint.

Fifteen or more Democrats will announce Wednesday that they are aligning in a working group focused on fiscal responsibility, said Sen. Evan Bayh, D-Ind., a key member of the group.

The senators this week held their second meeting, where Senate Budget Chairman Kent Conrad, D-N.D., gave a presentation on the budget, members said.

Staffers are also meeting over the next week regarding holding down spending in the budget.

While the budget will be in the forefront in coming weeks, Democratic centrists have weighed in recently on several fronts. At least eight Senate Democrats have signed a letter opposing use of the budget reconciliation process to pass climate change legislation -- a step Majority Leader Harry Reid, D-Nev., is mulling to deny Republicans a chance to filibuster the bill.

Moderate Democrats are also resisting entreaties from Majority Whip Dick Durbin, D-Ill., and Sen. Charles Schumer, D-N.Y., to back a housing bill that would allow bankruptcy judges to modify mortgage terms through steps including reducing the principal. Bayh and Sen. Arlen Specter, R-Pa., are pushing to pick up backing from Republicans and Democrats who are uneasy with Durbin's approach for an alternative that would make the so-called cram-downs available to far fewer homeowners.

Bayh said his approach is more likely than Durbin's to win 60 votes because it will not "impose higher costs on the vast majority of Americans that won't have to resort to bankruptcy in the long run."

The increased moderate heft results from Senate Democrats' pick-up of many formerly Republican seats in 2006 and 2008. The wins brought in more Democrats who come from right-leaning states with electoral incentives to line up with longer-serving centrists like Bayh and Sen. Ben Nelson, D-Neb. Sens. Mark Warner of Virginia, Jeanne Shaheen of New Hampshire and Kay Hagan of North Carolina are among those likely to join or vote with the moderate group.

The group appears particularly focused on Obama's climate change plans in his budget outline, with Nelson organizing moderate efforts on that front, senators said.

The senators anticipate their position will be strengthened by new economic news. "I think you'll see in coming days there will be new estimates coming in that will reflect that the economy is not good that will make the budget challenge even more difficult," Bayh said.

"You have to set priorities and fund what you can and perhaps defer for a modest period of time those things that you can't afford." Bayh said, adding, "because there is a limit to things that we can borrow from the rest of the world without it causing grave economic consequences in the longer term."

With Republicans staking out positions generally opposed to the budget, moderates see an opportunity to hold sway in various areas.

"You will probably see the Republicans provide no votes for addressing the [financial crisis], and so it will be up to moderate Democrats to play a constructive role in trying to do that," Bayh said.